The Central Bank of Nigeria (CBN) has directed that Mortgage banks in the country should have a capital base of two point five billion naira (N2.5b) for effective banking services.
However, the new order is affecting the operations of Adamawa State Homes and Savings Yola who have only a share capital of one hundred and forty two million naira (N142m).
Managing Director and Chief Executive Officer, Adamawa Homes and Savings Limited, Dr. Giscard Norris Stanley, who disclosed this when the Adamawa State House of Assembly Standing Committee on Finance, Budget and Appropriation visited the bank as part of its oversight function.
He said the bank was incorporated in 2004 and began operation in 2005, with the share capital of one hundred million naira (N100m), but now has a share capital of one hundred and forty two million naira (N142m).
“The position is not tenable with the introduction of new share capital base for Mortgage banks by the Central Bank of Nigeria (CBN) of two point five billion naira (N2.5b); with the inability to scale up the bank’s share capital to the level since 2013, when the new share capital base was introduced is adversely affecting the operation of the bank”. He added
Stanley added that CBN has mounted pressure on the bank to recapitalize, with enough warnings, noted that the intervention by Governor Ahmadu Umaru Fintiri had saved the bank from liquidation.
“The two point five billion naira (N2.5b) will remain in the system and open for use by the state government, an indication that the bank has the capacity to do the business as required by law”. Stanley said
He explained that it is the only Mortgage bank in the entire Northeast Nigeria, stressing that the business environment is so wide and limitless that other governments can patronize its services.
Responding, the Chairman of the Committee and Member representing Demsa constituency, Mrs. Kate Raymond Mamuno has pledged that the Committee will support the Bank with two point five billion naira (N2.5b) for recapitalization.
“The recapitalization of the State Homes and Savings will enable it perform its activities as expected by the citizens and the government of the state, as such the committee will do everything possible to ensure the recapitalization of the bank as directed by the Central Bank of Nigeria”. She added
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